September 4, 2014
There has always been a certain degree of skepticism within the UK’s business community about the way the public sector goes about buying goods and services. Some of it is justified but some is unfair. The efforts of successive governments to address the problem demonstrates that there is always a will to improve things. So while a recent BBC Panorama documentary highlighted claims from one report that the NHS loses billions each year thanks to a range of errors and fraud in its procurement processes, we might also ask whether an equivalent private sector organisation with an annual budget of £109 billion would not also be open to a wide range of eye-wateringly expensive failures and inefficiencies. Unfortunately there is a tendency in the media to want to expose ‘waste’ in public sector purchasing, which can politicise what are perfectly reasonable decisions, when you examine them.
For example, a report in the Daily Mail claimed that the Parliamentary Expenses Watchdog IPSA was wasting taxpayers’ money by leaving its former premises partly furnished and buying new furniture for its new HQ. It didn’t matter that this was to make it easier to rent the old building, the move was used – possibly deliberately -to bolster a preconception.
Such criticisms are not limited to large central government procurement budgets, however. We are all aware of the standard meme of the gratuitously expensive public sector light bulb. Recently, a local newspaper in Sheffield decided to drum up controversy by reporting indignantly that the council had spent £17,000 on office chairs for 230 staff. This was £73 per chair when, the paper claimed, it is possible to buy them from Ikea for £13. the story fed prejudices about public sector buying, rather than addressing the real issue of how buying cheap chairs at £73 a time is a false economy both in terms of their durability and ability to look after the well-being of office staff. If anything, the council has under-spent, possibly wary of public opinion.
Nevertheless there is always more that can be done to make sure that buyers and suppliers work together to create win-win situations. In May this year the Cabinet Office met with the CBI to discuss how the public sector and private sector could reform the public sector procurement framework. The outcome was a commitment to set up a working group comprising of the CBI, Government chief procurement officer Bill Crothers, HM Treasury, chair of the CBI Public Services Strategy Board Ruby McGregor Smith and senior business leaders. One of the key objectives, according to the Cabinet Office’s own report, is to: “build on the government’s world-leading transparency record by working collaboratively with business to foster greater openness and trust between government and its suppliers. It is important to business of all sizes that government gets this right and listens to their views.”
The issue of transparency will be essential in ensuring the best outcomes. But it would also be useful if commentators in the media would understand the complexities involved in procuring the huge amounts of goods and services the public sector does each year. They should understand that the history of public sector procurement in the UK is an ongoing challenge which changes over time, so what was right for one era – for example, the centralised procurement function of the Office of Government Commerce – is not necessarily right for another. What we should be focusing on is whether the public sector is always looking to improve the way it carries our procurement, and on that score we can say it certainly is.
Justin Miller is the sales director of office furniture and ergonomics specialist Wellworking.